Prime Minister requests pilot implementation of bad debt handling

Documents guiding the implementation of the Resolution on bad debt must be issued before August 15, 2017, as requested by the Prime Minister.

To implement the pilot bad debt settlement as approved by the National Assembly in Resolution 42 on pilot bad debt settlement of credit institutions, the Prime Minister requested leaders of relevant agencies to focus on directing the implementation of the provisions in the Resolution.

Accordingly, the agencies will deploy preventive measures, minimize bad debt and improve credit quality of credit institutions; promote the role of the Vietnam Asset Management Company (VAMC) in handling bad debt.

The Prime Minister requested a pilot implementation of bad debt handling. Photo: PV.

In addition, strive to reduce the ratio of bad debt on the balance sheet of the credit institution system, bad debt sold to VAMC and bad debt classified by debt classification measures to below 3% by 2020 (excluding bad debt of weak commercial banks approved by the Government to be handled according to a separate plan).

In order to prepare conditions for implementation, the Prime Minister requested ministries, branches and localities to disseminate and propagate the Resolution, to be completed before August 15, 2017.

The Ministry of Natural Resources and Environment shall preside over and coordinate with relevant agencies to guide the registration of mortgages on land use rights and assets attached to land in accordance with the provisions of the Resolution. The State Bank shall preside over and coordinate with relevant agencies to guide the purchase and sale of bad debts by VAMC in accordance with the provisions of the Resolution. Documents guiding the implementation of the Resolution must be issued before August 15, 2017.

The Prime Minister also assigned the Ministry of Justice to direct enforcement agencies at all levels to implement regulations on civil enforcement related to bad debts of credit institutions and VAMC according to the provisions of the Resolution; focus on directing and organizing the prompt and lawful implementation of judgments related to credit and banking that have come into legal effect.

The Ministry of Public Security directs police agencies at all levels to perform the task of maintaining security and order when credit institutions and VAMC exercise the right to seize collateral of bad debts handled according to the provisions of the Resolution.

The Ministry of Natural Resources and Environment directs the agencies registering ownership and use rights of assets to be responsible for carrying out procedures for transferring ownership and use rights of assets to the buyer and transferee of collateral assets of bad debts of credit institutions according to the provisions of the Resolution.

Regarding bad debts related to the state budget, the Prime Minister assigned the Ministry of Planning and Investment to preside over and coordinate with relevant agencies to develop a plan to allocate capital sources to pay off outstanding debts in basic construction related to bad debts under the spending responsibility of the central budget and bad debts of the lending program as designated by the Government.

Local authorities are responsible for developing plans to allocate capital sources to pay off outstanding basic construction debts related to bad debts that are the responsibility of the local budget.

The State Bank of Vietnam is responsible for supervising, inspecting and examining credit institutions and VAMC in implementing the Resolution.

In addition, the Prime Minister assigned the State Bank to coordinate with the Ministry of Justice and relevant ministries and branches to review and report to the Government on proposals to perfect the legal system on handling bad debts and secured assets based on the practical application of the provisions of the Resolution before August 15, 2021.

In addition, the State Bank is also responsible for perfecting the legal framework on credit institutions' governance, especially risk management; continuing to research and propose perfecting legal documents on credit granting by credit institutions to limit the occurrence of bad debts; and enhancing the inspection and supervision capacity of the banking inspection and supervision agency system.

The Ministry of Justice is responsible for completing and submitting to the Government for promulgation the Decree on secured transactions.

According to VNE